Yardi Systems, Inc. v. RealPage, Inc. et al.

Court Name:
United States District Court for the Central District of California

Summary:

A United States District Court for the Central District of California trade secrets misappropriation case will become more complicated as it progresses, as Judge Wright recently allowed five of the defendants' antitrust-based counterclaims to survive motions to dismiss. The core allegations in the case, Yardi Systems, Inc. v. RealPage, Inc. et al., concern RealPage’s acquisition of a firm that formerly consulted for Yardi (DC Consulting, also named as a defendant). Yardi and RealPage are rivals in the real estate management software industry. Through the acquisition of the consulting firm, Yardi alleges that RealPage was able to gain information that allowed it to hack in to its servers. Yardi accuses RealPage of thereby accessing pricing data and customer lists with an eye towards courting Yardi customers to run Yardi’s software on RealPage’s cloud computing services. RealPage deflected these claims with an antitrust defense, founded upon “customer interference and intimidation” embodied in Yardi’s practice of forcing its software users to sign licensing agreements that disallow use of its software on RealPage’s cloud servers. The judge held in a Feb. 13, 2012 order that RealPage had sufficiently stated a counterclaim that Yardi was attempting to create a monopoly, allowing the antitrust argument to advance to the next stage of litigation. This decision serves as a reminder that antitrust claims are available as affirmative defenses and counterclaims to trade secrets misappropriation allegations.